A district court erred in holding that patents held by Amdocs (Israel) Limited and directed to a system for tracking Internet bandwidth were invalid as abstract, according to the U.S. Court of Appeals for the Federal Circuit. The court found that, even if the patents were directed to invalid concepts as found by the district court, the representative claims contained inventive concepts that transformed the abstract concepts into patent-eligible subject matter (Amdocs (Israel) Limited v. Openet Telecom, Inc., November 1, 2016, Plager, S.).

Combined, U.S. Patent Nos. 7,631,065 (the ’065 patent), 7,412,510 (the ’510 patent), 6,947,984 (the ’984 patent), and 6,836,797 (the ’797 patent) describe a system for tracking the amount of bandwidth that customers of Internet Service Providers were using. Data mediation software collects, processes, and compiles customer data records so that network usage can be tracked and billed appropriately.

In January 2013, the court granted Openet’s motion for summary judgment of noninfringement. On August 1, 2014, the Federal Circuit reversed, finding that unresolved issues of fact existed as to three of the patents and the district court had erroneously construed a claim term in the fourth patent. On remand, Openet filed a motion for judgment on the pleadings, in which it argued that all of the asserted claims were invalid under 35 U.S.C. § 101 as being directed to unpatentable abstract ideas in light of the Supreme Court’s intervening decision in Alice Corp. v. CLS Bank Int'l, 134 S. Ct. 2347 (2014).

The district court granted Openet’s motion for judgment, finding that the patents were not directed to patent eligible subject matter under § 101. Amdocs appealed.

In Alice, The Court articulated a two-step process for determining whether a claim was directed to patent-eligible subject matter. First, a court must decide whether the claims at issue are directed to a patent-ineligible concept. If so, then the court must determine whether there are additional elements in the claims that transform the nature of the claims into a patent-eligible application. Alice clarified that a claimed invention directed to an abstract idea that is implemented on a generic computer is not "sufficient to transform the claimed abstract idea into a patent-eligible application."

Courts examine earlier cases in which a similar or parallel descriptive nature can be seen—what prior cases were about, and which way they were decided—to determine whether claims are abstract. This is the classic common law methodology for creating law when a single governing definitional context is not available. After reviewing earlier cases with similar claims, the court looks at the specific claims at issue.

The ‘065 patent. The ‘065 patent claims were not invalid as abstract as held by the district court, according to the appellate court. Claim 1 requires "computer code for using the accounting information with which the first network accounting record is correlated to enhance the first network accounting record." "Enhance" was construed as meaning "to apply a number of field enhancements in a distributed fashion." The district court held that claim 1 was directed to the abstract idea of "correlating two network accounting records to enhance the first record." As noted by the patent, the distributed enhancement was a critical advancement over the prior art. The claim entailed an unconventional technological solution (enhancing data in a distributed fashion) to a technological problem (massive record flows which previously required massive databases), necessarily requiring generic components to operate in an unconventional manner to achieve an improvement in computer functionality. The claim was not so broadly written as to cause preemption concerns, but was narrowly circumscribed to the particular system outlined.

The ‘510 patent. Representative claim 16 requires that the network usage information is collected in real-time from a plurality of network devices at a plurality of layers and is filtered and aggregated before being completed into a plurality of data records.The district court held that claim 16 was directed to an abstract idea of using a database to compile and report on network usage information without any sufficient inventive concept. The collection, filtering, aggregating, and completing steps all depend upon the invention’s unique distributed architecture. This architecture was similar to that in the other patents at issue.

The ‘984 patent. For similar reasons as outlined for the ‘065 and ‘510 patents, the court found that the claims of the ‘984 patent were eligible for patenting. Representative claim 1 requires the completion of a plurality of data records in a manner that depends upon enhancement—which depends upon the system’s distributed architecture. The district court concluded that claim 1 was directed to the abstract idea of "reporting on the collection of network usage information from a plurality of network devices." However, the overall ordered combination of all of the limitations was unconventional, and produced the advantage over the prior art by solving the technological problem at stake.

The ‘797 patent. Again, for the reasons discussed for the other three patents, the district court erred in finding that representative claim 1 of the ‘797 patent was directed to the abstract idea of "generat[ing] a single record reflecting multiple services." As with the other patents, even if the district court’s finding that the patent was directed to ineligible concepts, the claim was eligible for patenting based on containing an inventive concept. Many of the components and functionalities of claim 1 were neither generic nor conventional individually or in ordered combination. Rather, they describe a specific, unconventional technological solution, narrowly drawn to withstand preemption concerns, to a technological problem.

Dissent. The dissent argued that the majority’s approach—avoiding a determination of whether the asserted claims were directed to an abstract idea, or even identifying what the underlying abstract idea is—was contrary to Alice. Also, the dissent took issue with the majority’s eligibility determination based on the use of a "distribution architecture" because this limitation was insufficient to satisfy the inventive concept step in Alice.

For the ‘065 patent, the dissent noted that limiting the abstract idea of "correlating two network accounting records to enhance the first record" to the context in which the information relates to network accounting records is a field-of-use limitation that did not supply an inventive concept. The use of "computer code" to automate logic was also not an inventive concept because "recitation of generic computer limitations does not make an otherwise ineligible claim patent-eligible." The abstract idea of "gathering and combining data" with a computer is ineligible when only limited by the type of data. The concept of gathering and combining data is all that claim 1 recited.

The dissent would have found that the ‘510 patent was not directed to an abstract idea. Representative claim 16 captured enough of the distributed protocol disclosed in the specification to pass through the coarse eligibility filter of § 101.

Claim 1 of the ’984 patent is analogous to claim 16 of the ’510 patent, except that it adds a limitation reciting details of the distributed architecture. It was error for the district court to dismiss these process limitations solely on the basis that "filtering, completing, storing, allowing, submitting, and outputting" are "conventional" types of activities for computers, according to the dissent. The dissent would reverse the district court’s holding that claims 1, 2, 7, 8, and 13 of the ’984 patent were not patent eligible.

Finally, the dissent would have held that claim 1 of the ’797 patent was ineligible and would affirm the district court’s determination.

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